In the past 20 years, there has been a growing interest in the workings of Chinese management and organisations. Recent research has also focused on Chinese leadership. This paper provides a project management practitioner’s perspective of project stakeholder and conflict management, focussing on the Chinese environment. Cultivating the complex web of relationships in projects is already a difficult art to master. It is even more so, in China, where there is a complex and deeply rooted practice of cultivating relationships as a form of currency that can be saved and spent between parties.

China’s open door policy in the eighties had successfully attracted many western organisations and westerners to enter the massive Chinese domestic market or partner with Chinese enteprises in joint projects. The procedures and processes widely adopted by Western trained project management practitioners, are in conflict with the top down approach or people centric system employed by the Chinese. This conflict post various questions such as what are the gaps in both management approaches and how to address these gaps. This paper intends to provide some answers to these gaps drawn from the author’s many years of living, working and observing in Europe, USA and East Asia.

The paper starts by looking at how the world’s de-facto standard in Project Management – the PMI Guide to PMBOK 3rd Edition – addresses project stakeholder and conflict management in the Human Resource and Communications Management knowledge areas. To illustrate the differences between Western Management (based on PMBOK) and Eastern Management approaches, 3 mega airports programs the author had directly involved will be used as case studies, with the PMI PMBOK framework as the under laying framework for analysis.

Based on the author’s extensive experience of managing complex projects in modern day China, he concludes that in order to manage stakeholder and conflicts, and ultimately deliver projects successfully in China, cultivating good Guanxi is essential. Guanxi is a key element in Chinese Culture, and it has been found to facilitate timely approvals, waivers and stakeholders’ support and assistance throughout the project. With the foundation of good Guanxi in place, project managers minimize the risks, frustrations, and disappointments when leading or managing project in China. At a minimum, the tips and experiences shared may able to help Western trained project management practioners to avoid unnecesasary stakeholder issues and conflicts. However, this paper is not intended to justify which management approach is superior to the other .

Introduction

There are compelling reasons to study China’s management practices and to understand the Chinese way of thinking. China’s transformation into a dynamic private sector- led economy and its integration into the global economy have been among the most dramatic economic developments of recent decades. Indeed, China’s growth performance over the last two decades has been spectacular, with GDP growth averaging almost 8 percent.

This paper investigates the dynamism of Guanxi usage in the context of managing projects in China, specifically in the areas of stakeholder and conflict management. By doing so, this paper intends to help project management practitioners already in China or intend to go into the China market especially those from the Western countries, to gain a deeper and more practical insight into the Chinese social network, and to help them make effective cross-cultural adaptation and project decisions in the unfamiliar cultural environment of China.

Background

PMI Project Management Framework

A Guide to PMBOK (PMBOK) 3rd Edition published by Project Management Institute (www.pmi.org) defines a project as a temporary endeavour undertaken to accomplish a unique product, service or result. Projects have defined start and end point and specific objectives that, when attained, signify completion. Projects are unique and only done one time. As such, it is not repetitive or routine work.

Project Management refers to the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements. The focus is to meet stakeholder’s needs and expectations, deliver projects within budget, and complete projects on time. Project management achieve these objectives by organizing, planning, monitoring, controlling, and correcting project activities in a methodical manner throughout the project lifecycle.

The project management framework defined by the PMBOK provides a standard of processes, best practices, tools and techniques for project managers to follow to ensure successful project completion. The PMBOK framework recommends 44 processes that fall into 5 project management process groups across 9 knowledge areas.

The author will use this framework to analyse the similarities, differences and challenges when he discusses the case studies in the later part of this paper. Although the term “Project Management” is coined by the Western world, project management is not a new discipline in China. Project Management has been in existence since the days of the ancient Chinese civilization.

Drawing upon the premise that project management is not an emerging phenomenon in China, what are the key management practices with regards to issues and conflict management in China ? How does established standards such as PMBOK work in a volatile emerging country, like. China?

Stakeholder & Conflict Management – PMBOK Approach

If you search for the definition of the term “Stakeholder” in Google, you will be surprised by the huge differences in the way this simple word is defined. It perhaps proves – in a way – just how confused people get about Stakeholder Management and how inconsistent the different approaches to it can be! In the context of projects, the PMBOK define stakeholders as the people that have an interest in the project outcome or process. That interest can either be positive (wanting the benefits of the outcomes or process of your project), or negative (seeing the outcomes or process as a hindrance to them).

Project stakeholders may include: project sponsors, steering committee members, business unit and line managers, project team members, end users of the products or services resulting from your project, contractors and consultants supplying services to your project, material and product suppliers departments supplying resources, infrastructure and expertise (such as IT and HR), and sometimes various other groups; such as employees, public interest groups like environmental organizations, strategic partners, journalists, public monitoring bodies or government authorities.

A project manager has to assess and evaluate these positive or negative forces in order to develop a precise stakeholder management plan which can meet various stakeholders’ needs and expectations while not compromising the project basic constraints, i.e scope, time, cost, quality . In this regard, good stakeholder management is a vital element in delivering successful projects.

Stakeholder Analysis is recommended as a technique in the Communication Planning Process to identify the key people who have to be won over during the entire project life cycle. It involves the following steps:

1. Stakeholder Identification
a. An up-front identification of who the stakeholders are and trying to find answers for following
i. Who will be impacted?
ii. Who are the decision makers and in what area?
b. Who are the subject matter experts ?
c. Whose signature is needed to obtain acceptance or payment ?

2. Plotting Power and Interest Matrix
The next step is to assess their power, interest and the level of influence which will help the project manager prioritize which stakeholders to focus on. It involves trying to understand what sort of influence each stakeholder has and determining how their influence could impact the success or failure of the project outcome when their interest is not protected or agenda not met.

Attempt to assign each stakeholder into the quadrant of a 2 x 2 matrix. This quadrant has Power as the Vertical axis and Interest as the Horizontal axis to provide a clear picture of their relative importance. It allows the project manager to have a clear perspective of the stakeholders that can impact the project outcome, and effectively plan on managing these stakeholders:

a. High power, High Interest
i. these are the people you must fully engage with, and make the greatest efforts to satisfy.
b. High power, Low interest:
i. put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
c. Low power, High Interest:
i. keep these people adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the details of your project.
d. Low power, Low interest:
i. monitor these people, but do not bore them with excessive communication.

3. Document the Assessment
a. Determine and document how each stakeholder is affected by the project.
b. What are the impacts? When do they occur?
c. How does the impact affect the stakeholder?
d. It is important to determine the extent to which a stakeholder’s problems, needs and interests are impacted by project operations or desired outcomes.
e. Defining the impact on the stakeholders will influence the communications plan.

4. Response to Stakeholder Analysis
a. Determine the support necessary from the stakeholders to ensure the project’s success and what the current position and attitude of each stakeholder is, with respect to the project objectives and expected outcomes.
b. Note that not every stakeholder needs to be an enthusiastic supporter for the project to succeed.

5. Review assessment of each stakeholder and understand the gaps between their current attitude and the desired attitude. Identify what motivates stakeholders and how they can be won.
Manage Stakeholder

The Stakeholder Communication Plan is an important document. It documents how to strategically win stakeholders to support the project, and to close any gaps with the identified stakeholders.

1. For each stakeholder, think through the levels of support required from them and the roles they should play. Think through the actions required from them.
2. Next, identify the messages to convey to these stakeholders to persuade them to support and engage with the project.
3. Identify actions and communications required to win and manage the support of these stakeholders. With the time and resource available, plan how to manage the communication to and the input from stakeholders.
4. Focusing on the high-power/high-interest stakeholders first and the low-interest/low-power stakeholders last, devise a practical plan that communicates with people as effectively as possible and that communicates the right amount of information in a way that neither under nor over-communicates.
5. Finally, determine the best time to communicate with the identified stakeholders.

As the project goes through its lifecycle, the project manager must be observant and sensitive to changes such as the introduction of new stakeholders, change of priorities, assumptions turning invalid, and any changes in stakeholders’ needs and priorities after they have learn more about your project. This is especially pertinent to projects that span many months or years. Hence, stakeholder management is not a one – time exercise but a continuous effort throughout the entire project life cycle.

Manage Project Team

Team Conflict Resolution
Conflict is commonly understood as “a situation of competition in which the parties are aware of the incompatibility of potential future positions and in which each party wishes to occupy a position which is incompatible with the wishes of the other.” A project level conflict is commonly seen at the early stage of a project due to different understanding, interest, constraints or preferences of each stakeholder. Sometimes, conflicts at early stage of project can be constructive and healthy, as stakeholders are given opportunities to raise their concerns, constraints , assumptions, needs and expectations from the project. Ideally, this paves the way for innovative win-win solutions to created to satisfy the majority of stakeholders needs and expectations, in an open and transparent manner. . Project conflicts can force people to confront underlying issues or possible defects in a solution and choose a better approach. As such, constructive conflict with a proper resolution can be healthy.

However, if conflict is not managed properly or not allowed to be discussed openly or only surface up at middle or tail end of the project, it can be detrimental to the project. When this occurs, it threatens team cohesiveness, team relationships, and interpersonal connections. As a result, the problem remains, energy is taken away from more important activities or issues, morale of teams or individuals is destroyed, and groups of people or teams are polarized. Sometimes, the searching for resolution to a project level conflict become too personalise or when differences in personalities or culture are involved, a project level conflict can escalate EASILY to become personal level conflict which could have blow the impact out of proportion !!

Issues Management

Effective Project Management is not possible without proper handling of changes and uncertainties. PMBOK recommends the project manager use the Risk Identification process in the Risk Management Knowledgement Area during the project planning phase. This is to identify uncertainties and develop appropriate risk response measures. These are documented and monitored during project execution. Project Issues will arise, often because a risk identified early was not managed properly, or the risk response measures was not effective, or the project team failed to identify the risk /uncertainties in the early stage of the project .

Every project issue identified should be formally communicated, documented, monitored, assigned, reviewed and resolved. It is the project manager’s duty to review and determine whether or not the issue is directly related to the project, e.g. Scope, Deliverables, Schedule and Resources, to determine the actions necessary to resolve the issue and allocate those actions to members of the project team until final issue resolution. Depending on the environment and the customer’s needs and expectations, most organizations have an accepted way of dealing with issues. Formal approaches include the establishment of a Project Steering Committee, Project Working Committee or Change Control Board.

However, when a project level issue failed to be resolved in a professional manner, it is possible to see the issues snowball to become a personal level issue between two or more individuals involved in the dispute or issues resolution process. Sometimes, informal approaches to address this include leveraging on relationships and resolving issues at the individual level.

How does Stakeholder Management work in China?

In order to be able to objectively analyse the topic and provide tips for surviving in China’s unique project environment, the author will leverage on the experiences of three complex mega projects in China that he was directly involved in, as case studies.

Complex Mega Projects
China’s current appetite for mega projects seems insatiable, and from its development plans – long term. This is not surprising given the country’s past limited investment in transport infrastructure and its recent phenomenal economic growth, fast motorisation and urbanisation rates and widespread modernisation efforts

Complex mega projects are characterised by a degree of disorder, instability, emergence, non-linearity, recursiveness, uncertainty, irregularity and randomness, and dynamic complexity where the parts in a system can react / interact with each other in different ways. Detailed long-term planning is therefore impossible. Applying traditional project management approaches with their focus on long-term planning, rigid structures, precise work breakdown structure definition, and elaborate control rules in these project environments will be counter-productive.

Scope:
Multiple products and services are identified and assembled into a complete solution. No individual or team can create the entire product, and no individual project manager can oversee the entire project directly. Multiple sub-project efforts are required.

Execution:
Complex coordination mechanism and procedures involved. Long Implementation timetable and high expectation, tight schedule, no room for failure.

Technical :
Mission and sometime “life and safety” critical. Can be innovative without many reference success stories. Typically requires different set of rules and guidelines.

Case Studies Background:
Three High Profile – Multi-billion – Complex Mega Programs in China :
• Shanghai Pudong International Airport (China) Project (1998 – 2001)
• Guangzhou International Airport (China) Project (2002 – 2004)
• Beijing International Airport (China) Project (2005 – 2008)
Traditionally, airports operate in an environment where the airport system is disintegrated. Information created by the different departments is shared or exchanged through primitive means such as calling a meeting, using a telephone or fax, sending a memo, exchanging computer diskettes, etc. These approaches are inefficient and prone to errors.
To streamline information flow, and improve efficiencies, three International Airports in China adopted the concept of Airport Operational Database (AODB). This calls for the systems integration of the silos of information sitting in disparate legacy IT systems. The objective was to allow information to be communicated and exchanged seamlessly; thus improving efficiency, competitiveness and strengthening the bottom line.

The PMBOK ® 3rd Edition dedicates many pages to the importance of human resource and communication management. However there was only scant reference to the influence that culture has on the human behaviour. The exposure draft of PMBOK 4th Edtion which is due for release in 2009 places more emphasis on the importance of cultural awareness to highlight the need for the project manager to understand the potential cross-cultural issues arising from the global projects, global teams or virtual team project environment. The author’s personal experience in managing mega projects in China supports his viewpoint that it is not enough to simply understand the global standard and best practices. As Ramaprasad and Prakash (2003) have noted, much of it focuses on global knowledge from a Western viewpoint, with little about the interplay of local knowledge and culture. Part of the key to project success in a foreign country is to acknowledge, understand and incorporate that country’s ‘silent language’ (Milosevic 1999; Hall & Hall, 2003). To be able to interpret, understand and communicate in a country’s silent language, a project manager who is leading and managing project in China must at minimum, gain an understanding of following dimensions which is applicable to China and most parts of the Asia Pacific region :

Importance of Guanxi

Ambiguous Thinking – Concept of Shade
Base on this concept, the ideal state is not one of the extremities, but a balance between black and white or yin and yang. The key focus is to achieve a state of balance, harmony, equilibrium and steadiness. This sometimes result in ambiguities, lack of clarity (instead of clear cut). In the Chinese business environment, this is acceptable and issues are resolved from the perspective of balance and equilibrium instead of absoluteness of right or wrong. As an example, it can be observed that in most instances, a Chinese project team member or business associate, will never provide a definite answer to a question, preferring to leave some room for ambiguity.

Power and Authority
The ‘power distance’ is high in China, compared to Western culture. The Chinese are still receptive to dominant, dictatorial bosses and authoritative figures. Hence, project manager are expected to be decisive, firm and assertive.

Business in China is governed by the centuries-old custom of getting things done through “Guanxi”. “Guanxi” literally translates to “relationships”, although in the Chinese cultural context, its meaning and practical application is much richer and encompassing.

The word consists of two characters, guan关and xi系. Guan originally meant a lock or a door; its extended meaning is “to close up.” Thinking metaphorically, inside the door you may be “one of us” but outside the door your existence is barely recognized. In addition, guan can refer to “doing someone a favor.” For instance, guan xin关心 means “showing solicitude for,” guan huai关怀“showing loving care for,” and guan zhao关照, means “illuminate” or “looking after” or “support.”

Xi系 means to tie up and extend relationships, such as kinship (shi xi世系) and directly-related members of one’s family. It implies formalization and hierarchy. Whilst the word primarily applies to individuals, the concept can also be used similarly with organizations (e.g., xi系means “department”).

In practice, Guanxi, refers to networks of informal relationships and reciprocal exchanges of favours that dominate business activity throughout China and much of the Asia Pacific where the Chinese diaspora is spread out. It involves the obligation of one party to another, built over time by the reciprocation of social exchanges and favours. If one has “Guanxi” with another, one will be quick to do a favour, act on another’s behalf and depending on the depth of the relationship, do anything necessary for the other party. By establishing this type of relationship with someone, the other party is implicitly agreeing also to be available to reciprocate when the need arises. In such a way “guanxi” can be considered as a type of currency that can be saved and spent between the two parties. Like money, it is a resource that can also be also be exhausted, so one must be sensitive not to overextend the “guanxi” that has been established. The Chinese businessmen mentality is very much one of “You scratch my back, I’ll scratch yours.” It is an important concept to understand if one is to function effectively in Chinese society.

“Guanxi” is based on reputation, trust and personal relationships. It involves constant trade-offs between resources, budget and timeline to ‘give’ what the buyer ‘really’ wants ethically. The term ‘Guanzi’ has been often loosely translated as ‘relationship’ in Western literature. However, ‘relationship’ and ‘Guanxi’ are not exactly the same. While a relationship between two parties can be established purely based on the common interests of the parties involved and may not be commercially motivated, Guan Xi is established on the basis of family connections, common backgrounds or long lasting friendships and in pursuance of personal or organization interest and benefits. Also, Guanxi is very much contextual in nature.

Someone is described as having good Guanxi if their network of influence could assist in the resolution of the problem currently being spoken about. The most common response to indicate acceptance of an apology in the Mandarin language is méi guānxi (沒关系) which literally translated means “doesn’t have implications”.

Principles of Guanxi Cultivation

According to Luo, Y.D. (2000), there are seven important principles underlying Guanxi cultivation, utilization and maintenance:

1) Guanxi is transferable.
First, Guanxi is transferable. If A has Guanxi with B and B is a friend of C, then B can introduce or recommend A to C or vice versa. Otherwise, contact between A and C is unlikely. For this reason, formal business correspondence usually will not receive a reply until direct personal contact has been established. The success of transferability depends on how much satisfaction B feels about his Guanxi with both A and C. Transferability also means that Guanxi is different from friendship. Affection is important but not a prerequisite for Guanxi, whereas affection is necessary for friendship. Only strong Guanxi relations contain affection and, hence, friendship. Weak Guanxi partners, however, are not necessarily friends.

2) Guanxi is reciprocal;
A person who does not follow a rule of reciprocity by refusing to return favor for favor will ‘lose face’ and be seen as untrustworthy. Nevertheless, exchanges often favor the weaker partner. At the individual level, Guanxi links two persons, often of unequal rank, in such a way that the weaker partner can call for special favor for which he does not have to reciprocate equally. This reciprocity explains another distinction between Guanxi and friendship.

3) Guanxi is intangible;
It is established with an expectation of an unlimited exchange of favors. It is maintained over the long run by an unspoken commitment to others in the network. People who share a Guanxi relationship are committed to one another by an invisible and unwritten code of reciprocity and equity. Disregarding this commitment can seriously damage one’s social reputation, leading to a humiliating loss of prestige or face.

4) Guanxi is utilitarian rather than emotional;
Guanxi bonds two persons through the exchange of favors, rather than through sentiment. This relationship does not have to involve friends, though that is preferred. Guanxi relations that are no longer profitable or based on mutual exchange are easily broken. Because of this principle, individually-embedded Guanxi can easily extend to organizationally-embedded connections. Employees earn benefits such as bonuses, commissions, and promotions when they transfer personal Guanxi to the organization. Organizations also benefit from each other’s Guanxi exchanges. Returns are favored when the resources and skills of two parties are complementary and both parties strategically need each other.

5) Guanxi is contextual;
It involves interactive conduits between people. Cultivating Guanxi is completely context-specific. The giving of the same gifts will have three interpretation and outcomes:

eg Mr A gave a red packet with cash money of RMB10.00 to the boss

Context A: After finding out that the boss and spouse just had a baby
This is an accepted part of the culture of gift-giving. The red packet and money may be translate as a meaning of good luck and as a token of your care and love to the family and new born .

Context B: You are up for a promotion
The behaviour and red packet might be seen as instrumental. The boss may warn you not to do that again.

Context C: Your shiftless brother-in-law needs a job
It might be considered a bribe. The Guanxi you have developed might be destroyed due to your act.

Because Guanxi development is contextual, its construction and application is more an art than a science. Realizing the importance of Guanxi and understanding its principles are easy; finding and implementing an appropriate approach to fulfilling Guanxi relations is difficult.

6) Guanxi is long-term oriented;
Members of Confucian societies assume the interdependence of events, understanding all social interactions within the context of a long-term balance sheet. Every Guanxi relationship is regarded as a kind of stock to be put away in times of abundance and plenty, but brought out in times of need. It is developed and reinforced through continuous, long-term association and interaction. By contrast, social transactions in the West are usually seen as isolated occurrences, with great emphasis placed on immediate gains from the interaction. Some Guanxi relationships never end, but continue from generation to generation if continuously maintained.

7) Guanxi is essentially personal.
Lastly, Guanxi is personal. Guanxi between organizations is initially established by and continues to build upon personal relationships. When the person who brought a Guanxi connection leaves, the organization loses
the Guanxi as well. In other words, Guanxi has no group connotation. This principle largely explains the difference between Guanxi and inter-organizational networking in Western countries. Although personal attachment may facilitate inter-partner cooperation and mitigate inter-firm conflict, interpersonal relations are not a prerequisite for inter-firm networking in the West.

Rule by Law or Rule by Guanxi – Experiences from Chinese Projects

Chinese business ethics are built on the basis of Guanxi, which places relationships above other considerations; sometimes including an employer’s code of conduct and even the law. Perhaps even more confounding to Western businesses, the obligations of Guanxi can bridge time and distance, sometimes being invoked even when two people have not seen one another for many years.

Conventional project management practices which are largely based upon western management philosophies, rely heavily on formal documented agreements. The premise is on managing by the ‘Rule of Law’ and using the contract to establish project parameters, terms and conditions and to prevent conflict, hence making stakeholder management easier. It depends on an expensive and relatively inflexible legal system to enforce contracts. However, in China, personal relations are more important than written contracts. Contract is rarely referred to, or only at a minimum. Worst still most terms and conditions spelt out in the contract will incorporate the concept of Shade and Ambiguities Thinking mentioned earlier, in direct contrast to the level of clarity and transparency that characterise western management thinking.

Many expatriate project managers working in China complain about the amount of time and effort required to cultivate good Guanxi, by way of exchange of gifts, favours and hospitality. The fact is that, at its heart, Chinese culture is far more relational than Western culture, and this difference is especially pronounced in the business world. Western business culture is transactional with its emphasis on cost reduction and efficiencies, while Chinese business culture is relational and based largely on a code of honor and respect, which needs to be cultivated continuously over time.

Expatriate project managers conducting business in China must first understand that they are subject to some Chinese cultural ideals and norms of behavior that are uncommon in the West. They also must recognize that Chinese employees regard foreign business practices as alien and unnatural, just as foreigners may regard Guanxi as unethical.

Kohls (1981) and Marquardt and Kearsley (1999) discussed the differences between Western and non-Western cultures that can be used to clarify the impact of diverse values on motivation and training. Table1 identifies areas in which a clash of cultural values may result in conflicts that can impact project outcomes negatively using a minus sign (-).

Scenarios
Scenario 1
An overseas Chinese Project Manager observed this in his Shanghai project office. Shanghainese girls are well known for their beauty and fashion sense. He noted that only the female workers stayed back after 5pm to continue working. This got him perplexed. Could it be that the male staff was not committed to their work? Or could it be that the female workers were trying to get close to him?

Scenario 2
An European seller PM, has discovered that a daughter of a buyer was ‘rumored’ to have joined the project team as a member. This occurred during the last stage of contract negotiation…

Scenario 3
A Seller PM was not very happy with the manner he was being treated by the buyer PM who strongly believe in the adage “Customer is always RIGHT”. In one of the meetings, one of them banged his fist on the table to show his disagreement. This triggered an equally angry response from the other. It was clear who actually started the “table banging exercise”. SK heard more than 10 BANGS !! Within a few hours, the Steering Committee consisting of representatives from the buyer and seller side heard the news. …

Scenario 4-10
Due to space constraint, only three scenarios are published. You may contact the author if you are interested to know more scenarios and how each of these scenarios was handle by Rule by Law and Rule By Quanxi Project Manager respectively.

Summary

Globalization is leading to a growing number of international projects. In these projects, cultural differences can either be a source of creativity and enlarged perspectives, or they can be a source of difficulties and miscommunication. In addition, multi-cultural project teams are becoming the norm. More and more projects are being executed successfully using multicultural teams. To achieve project goals and avoid potential risks, project managers should be culturally sensitive in the environment they operate, and promote creativity and motivation through flexible leadership.

Based on the author’s extensive experience of managing complex projects in modern day China, he concludes that in order to manage stakeholder and conflicts and ultimately deliver projects successfully in China, cultivating good Guanxi is essential, as it facilitates timely approvals, waivers and stakeholders’ support and assistance throughout the project. With the foundation of good Guanxi in place, project managers minimize the risks, frustrations, and disappointments when doing business in China.

Presentation Description
This presentation leverages on the speaker’s years of experience in managing high Profile, Complex, Mega Projects in the Asia Pacific region as Program Director, Project Manager, Chief Engineer, and System Integration and Testing Manager for the successful completion of the multi billion US dollar Kuala Lumpur Malaysia, Inchon Korea, Shanghai Pudong, Guangzhou Baiyun international airports, and the soon to be completed, Olympic 2008 related program, Beijing Capital Airport Terminal 3 .

Traditionally, airports have been operated in an environment where the airport IT system is disintegrated. Information created by the different departments is shared or exchanged through conventional means. For example, calling a meeting, using a telephoneor fax, sending a memo, exchanging computer diskettes, etcetera, which is inefficient and prone to errors. Alternatively, these five International Airports in Asia Pacific adopted the concepts of the Airport Operational Database (AODB) and systems integration of the above mentioned disintegrated IT systems, allowing information to be communicated and exchanged seamlessly, improving efficiency, competitiveness and strengthening the bottom line.

SK starts his presentation by providing a comparison between the Best Practices in the PMI’s PMBOK(r) Project Risk Knowledge Area, versus the tools and techniques he used to identify and analyze Project Risks using the Nine High Impact Risk Areas Matrix, mainly Scope, Scheduling, Resources, Market Factors, Technical Challenges, Logistic, Roles & Responsibilities, Budget & Commercial, and Acceptance Criteria.

SK discusses the challenges which arose during his work in identifying and responding to various Risk Categories such as Project Life Cycle Risks, Technology Related Risks, and Environmental Risks. He will give real life examples, such as how a similar risk identified in Kuala Lumpur can not be responded to using the same response plan used in Shanghai, and an example of how multiple risks identified in Guangzhou, China had been merged and mitigated effectively using a single risk response plan. He will demonstrate to you how his advice to a Beijing Olympic 2008 Related program, the Beijing Capital Airport project, to use multiple risk response strategies to a single high impact risk identified during project initiation managed to convert threat to opportunity and introduced mega savings.

SK also discusses the hottest pressing issues, the do’s and don’ts, challenges and constraints in implementing Project Risk Management across different project environments, and how these can be linked to stakeholder risk attitude, budget, and when and how the risks are identified. Interesting enough, there are few risks identified but can not talk about them officially.

SK ends his presentation by sharing the lessons learned and priceless experiences gathered, some of which may have come a bit too late for him. He will share some new ideas and tips how to measure the effectiveness of the Project Risk Management in his previous projects, and what he intends to improve. Hopefully, SK can impart some secrets of success of how effective Project Risk Management helped the successful completion of these mega projects.

The presentation ends with some new ideas and tips he has used to measure the effectiveness of Project Risk Management in these projects, and share some thoughts and his personal lessons learnt which he will adopt if he is offered the opportunity to do a sixth airport project.
…………………………………………

ICT PROGRAM RISK MANAGEMENT:

ASIAN HIGH-PROFILE MEGA PROJECT SUCCESS STORIES

SECTION 1:

CONTEXT OF RISK MANAGEMENT CASE STUDIES

Firstly, the author (SK) starts with case studies on five international high profile, complex and mega projects in the Asia Pacific, followed by a revisit to the PMI PMBOK Risk Management knowledge area. Secondly, SK provides a comparison between the best practices in the PMI PMBOK® Guide Project Risk Knowledge Area, versus the tools and techniques he used to identify and analyze project risks using the Nine High Impact Risk Areas Matrix, namely Scope, Scheduling, Resources, Market Factors, Technical Challenges, Logistic, Roles & Responsibilities, Budget & Commercial, and Acceptance Criteria. Thirdly, SK illustrates that multiple risks can be managed using a single risk response and, conversely, that a single risk may be reduced via multiple risk responses. SK also shares his experiences in which 20% of the total project costs for Beijing Olympic 2008 Related Program was saved by exploiting a POSITIVE risk.

This is followed by a discussion of the challenges that arise during these projects in various capacities. Some of them may be similar in all projects, such as ‘project politics,’ whereas some are unique, such as developing a system without the end user involvement. SK also discusses the hottest pressing issues, the do’s and don’ts, challenges and constraints in implementing Project Risk Management across different project environments, and the way these can be linked to stakeholder risk attitude, budget, as well as when and the method through which the risks are identified and managed. SK ends his presentation by sharing the lessons learned and some priceless experiences gathered, some of which may have come a bit too late for him. SK will impart some secrets of success regarding how effective Project Risk Management was in contributing towards the successful completion of these mega projects.

SECTION 2:

FIVE HIGH-PROFILE MULTI-BILLION MEGA PROJECTS IN ASIA

SK has been involved in the following projects:

Project 1:

Kuala Lumpur International Airport Project: System and Testing Manager, part of Project Management Consultancy team

Project 2:

Inchon International Airport Project, Korea: Project Advisor, part of System Integrator beginning of the project and as External consultant appointed by the Gov. of Korea

Project 3:

Shanghai Pudong International Airport Project, China: System Engineer, Chief Engineer, Project Director, part of System Integration Team

Profile: Everyone knows about it, talk about it, and make money out of it. Projects such as these attract the attention of scores of people. Anything positive about these projects can give the Prime Minister and the politicians a chance to make this project into a political milestone, whereas anything negative will definitely capture the attention of the medias and call for the involvement of the Anti-Corruption Agencies.

Business: These projects have a high contract value. The lowest amount invested was US$ 1.7 billion, while the highest was US$ 4 billion. The source of project funding has very much determined the procurement process and how the program, projects or sub-projects was tendered out had a direct link to the first level of Work Break Down Structure (WBS)

Scope: Multiple products and services are identified and assembled into a complete solution. No individual or team can create the entire product, and no individual project manager can oversee the entire project directly. Multiple subproject efforts are required.

Execution: Complex coordination system and procedures involved. With an extensive implementation timetable, high expectations, and a tight schedule, we could not afford to fail. Project transparency has also been a challenge in all of these projects.

Technical: The technical aspect the project often requires a high-degree of different types of expertise. It may also require different set of rules of guidelines.

SECTION 3:

THE TRADITIONAL AIRPORT SYSTEM ENVIRONMENT

Traditionally, airports have operated in an environment where the airport IT system disintegrates information created by different departments, and is shared or exchanged through conventional means. For example, calling a meeting, using a telephone or fax, sending a memo, exchanging computer diskettes, etc., are inefficient and prone to errors. Alternatively, these five International Airports in Asia Pacific adopted the concepts of the Airport Operational Database (AODB) and systems integration of the above mentioned disintegrated IT systems, allowing information to be communicated and exchanged seamlessly, hence improving efficiency, competitiveness, and strengthening the bottom line.

SECTION 4:

THE INTEGRATED AIRPORT SYSTEM ENVIRONMENT

An Integrated Airport System (FIDS and BGS, air-traffic control tower to SMS or Internet information) creates a platform that allows information created by different departments such as the Baggage Handling System, the Airlines Reservations System, Security System, Departure Control System, as well as the check-in counters and aviation telexes, etc., to be exchanged or shared in a timely and more efficient manner. This consequently reduces the information error rates, improves customers’ satisfaction and cuts down operational costs, which eventually translates into an overall increase in competitiveness and promotes the airport’s business growth.

The cheapest Integrated Airport System cost around US$ 60 million, while the most expensive cost up to US$ 200 million.

In an Integrated Airport System, the IT Department at Airport Authority typically works as the client responsible for the capturing of requirements and managing the procurements and contractors, whereas the airport operator plays the role of end user who provides the requirements for the airport and prepare to take over the system. Finally, you will find the Master System Integrator, a few System Integrators, Contractors, Subcontractors, and Consultants for various organizations participating as well.

SECTION 5:

TOP 3 CHALLENGES & RISKS

Assuming you are going to be involved in one of these five mega projects, what are the issues, risks, and challenges you might face that you can identify?

SECTION 6:

PROGRAM LIFE CYCLE CHALLENGES / RISKS

There are several common challenges that can be found in these projects’ life cycle.

Challenges / Risks in the Initiating Stage

They are Politically Motivated:

At the initiating stage, like it or not, most of these high-profile mega projects are politically motivated. The amount of investments involved (billions of dollars), its impact to environment and societies, the national pride you feel when you see a new airport in a country – or what I call the national “debt” and “shame” in the case of the project’s failure – are just a few elements that lead to the politicians’ involvement in the initiating phase of the project. Some countries are able to pull it through within two to three years but some may still argue in the cabinet or the city hall about the needs and justification for a new airport, which typically costs US$ 1.5 billion to US$ 4 billion!

There is Poor Planning:

Before KLIA, a typical green field usually requires seven years to go from its planning to its opening. Because of external dependencies, namely the Commonwealth Games, the entire project team had to deliver the new KLIA in less than the usual time (around 3.5 years). A creative and (never done before) fast tract approach had to be adopted. For example, before we could complete a full planning session, we had to execute on whatever we had decided in the still on-going session. Of course, this resulted in re-works, wastage, and massive coordination issues later.

There are Unknowns and Uncertainties:

The concept of Total Airport Management System (TAMS) was introduced to KLIA without any reference site. This means that no one else had ever done it before. The so-called subject matter experts in fact may just “talk” about the theory with a lot of if-then-else and assumptions to protect their so-called “professional” image. Everyone in the project team (including themselves) knew that there was always a big gap between the theory and its execution!

There are Stakeholders’ Interests:

An example of this is when the Shanghai Airport received borrowed money from the Japanese Government on the condition that most of the contracts will be awarded to Japanese-based contractors as a first right of refusal.

Challenges / Risks in the Execution Stage

Complex Coordination:

At peak, more than 10,000 unique people are involved in the construction of the infrastructure. The Airport System will have 40 different teams, randing fromm 200 to 700 project team members at highest. Four to seven levels of subcontracting is not uncommon. 800 meetings were conducted at KLIA and 500 meetings were conducted at Shanghai just to resolve technical issues. Capturing and managing meeting minutes was a big job in itself.

External Events:

One critical political pressure faced by all project team members in KLIA was to be able to complete the airport which would have usually taken seven years to complete, but was completed in three and a half to four years in order to showcase one of the world’s masterpieces to the medias, visitors, and athletes who came to KL to participate in the Commonwealth Game in 1997.

Of course, there are more challenges and risks that the team faced throughout the course of these projects. To know more about these, please do not hesitate to contact the author for more details.

SECTION 7:

PMBOK FRAMEWORK

We are to know that one of the nine knowledge areas in the PMBOK Framework is called Risk Management, but SK will discuss here about the six processes (i.e. Risk Management Planning, Risk Identification, Risk Qualitative Analysis, Risk Quantitative Analysis, Risk Response Planning, and Risk Monitor and Control) in the Risk Management knowledge area.

Different projects have to practice risk management according to how the stakeholders feel comfortable or how they understand it. Indubitable, this brings in endless arguments and discussions on how risk identification should be conducted. The definition of risks, issues, challenges, and facts would also be confused with ambiguity.

Nevertheless, the nine high-impact risk areas identified through real-life project experience will be highlighted in the following section.

SECTION 8:

HIGH-IMPACT RISK AREAS

The nine consolidated High-Impact Risk Areas are:

Scope

Schedule

Resources

Market Factors

Technical Challenges

Logistics

Roles and Responsibilities

Budget and Commercial

Acceptance Criteria

Who Is Doing Risk Management and Why Are They Doing It?

When Do They Do It?

Both sellers and buyers spend a few months, if not years, to identify all the possible risks they can envision. It wasn’t ‘practical’ to have all risks centralized in a single register as what some theories and textbooks taught us to do; rather, each player had their own risk register. If all the identified airport system related risks could be consolidated, it could amount up to three thousand risks altogether across a three-year timeframe.

Why Do They Do It?

Sellers perform risk identification during bidding phase because they are willing to forego the deal if it is not a viable opportunity, as this is typically a kind of deal which can make you famous, profitable, or drive you to bankruptcy should you fail to deliver it! Otherwise, why bother to assess?

Challenges When Doing Risk Management

There are challenges for us as sellers to perform proper risk identifications because of limited access to information (customers may be reluctant to share information, or they may not have the information needed), wrong assumptions and constraints introduced, sometimes by the customers themselves or by an external party which is beyond the customers’ control.

For example, in four out of the five airports SK has been involved in, the government refused to announce who will be the end user and operator of the airport until six months before the airport’s opening. We were therefore capturing the system requirements with an assumption that the old airport operator will be engaged again for the new airport! It is therefore evident that political power struggle and commercial interest at their highest peak can cause delay in announcing the ultimate operator in four out of the five airports. We are dealing with what we call ‘real time risks,’ in which our decisions for the project could be rejected easily the moment the real airport operator comes onboard.

Some examples for our discussion are found below:

Area 1 : Scope

Risk 1 : Program scope may be too large or complex for a non-negotiable deadline.

Area 4 : Technology

Risk 4.1: Program Deliverables may not meet Life and Mission Critical Specification

Area 6 : Schedule

Risk 6.1: The ICT Program may be delayed because of others.

Area 8 : Commercial

Risk 8.2: New currency exchange policy may be introduced by the government.

SECTION 9:

CASE # 1: MITIGATE MULTIPLE RISKS VIA SINGLE RESPONSE

Instead of the conventional way responding to one risk with one response, it is also possible to mitigate multiple risks via a single response.

For example, in this case study, there are three risks identified in the project:

Risk 1.1: Program scope may be too large or complex for a non-negotiable deadline.

Risk 6.1: The ICT Program may be delayed because of others.

Risk 4.1: Program Deliverables may not meet Life and Mission Critical Specification.

Nevertheless, these risks were efficiently dealt with using only one risk response, which was building an integration lab. Investment was put into the construction of a mini airport, which enhanced testing methodologies and also allowed activities usually done at site to be brought forward to the lab.

Consequently, three significant benefits were obtained through this Risk Response strategy:

Benefit 1: Major construction delay has minimum impact on software and integration activities; IT software testing can still proceed despite major construction delays.

Benefit 2: Troubleshooting was made easy in Lab in comparison to doing it at Site; Requirements Validation and Verification can be performed at Lab as much as we like to.

The end result was that three out of the five airports managed to open with a stable Integrated Airport System.

However, only three out of the five airports were mentioned here; WHAT HAPPENED TO THE OTHER TWO?

SECTION 10:

CASE # 2: EXPLOIT SINGLE RISK (OPPORTUNITY) VIA MULTIPLE RESPONSES

Background: The Chinese RMB has been pegged to USD for years. In 2005, SK participated in a project planning session conducted by a customer. A major concern (which can hereby be distinguished as a ‘risk’) that has been identified was that the RMB could be UNPEGGED against the USD during the three years implementation program. The customer believed that the RMB would go from RMB8.10 to RMB7.5 over the 3 years period if the UNPEGGING ever took place.

Even though the risk identified here is only one, it could be mitigated via multiple responses.

Risk Response 1: Avoid risks by encouraging contracts to be signed in the Chinese RMB Currency.

Risk Response 2: Delay as late as possible during project implementations the procurement of items that must be purchased in currencies such as the USD.

Risk Response 3: In order to enhance the customer/buyer bargaining power, we centralize the procurement of as much items as we can, and introduce buy-local-product policies.

As a result of these risk responses, we enjoyed two benefits:

Benefit 1: There was a reduction of costs by 8%.

Benefit 2: By buying local products, the risk in currency exchange was also avoided.

It is therefore evident that responding to a single risk through multiple responses not only decreases said risk, but it could also bring more benefits to the project.

SECTION 11:

ISSUES AND CHALLENGES

There are also issues and challenges that may arise during the process of risk identification.

“Paper Talk” – They may have the experiences, but do not implement them.

“Copy & Paste” – In order to meet the Management’s requirements, they simply copy and paste risks identified from another project to their current project, which may not be entirely relevant (the two projects may be completely different from one another, so there will be different risks involved).

Project Visibility – This is best described by the notion that “I can’t see everything in the project unless someone tells me.” The problem with Project Visibility is that other people may be reluctant to share the risks or tell negative things because it may make them look foolish. Furthermore, sharing risks may also ‘rock the boat.’

Transparency – Different stakeholders may have different commercial interests, which lead to risks associated with their preferred contractors to not be allowed to be highlighted. Consequently, this could result in extensive cover-ups.

Politics & National Pride – People generally do not want to hear negative things. Furthermore, there are typically a lot of political organizations involved in the project, and the project team may not always know how to overcome the “Paper Talk” risk.

Issue 2: There are also issues and challenges that can be found at the Organization Level.

Investment – Organizations may be reluctant to invest money for the project. For example, going back to Case # 1 mentioned earlier (“MITIGATE MULTIPLE RISKS VIA SINGLE RESPONSE”), the remaining two airports that failed to open on schedule was due to the organizations’ reluctance to fork up the money to invest in building the integration lab.

Complex Stakeholders Relationship – Stakeholders may share a complex relationship due to conflicting interests. Moreover, along with conflicting interests, they may hence also have different priorities.

In conclusion, there are always issues and challenges that arise in the process of risk identification. Nonetheless, all the risks identified in this section of the article will never be found in the Risk Register. This is where experience makes us very valuable, because it is something that no one can take away from you.

“BEEN THERE, DONE THAT!”

SECTION12:

COMPLEX STAKEHOLDERS RELATIONSHIP

Stakeholders can be categorized into six different categories:

Customer

End User

Product Vendor

Prime Contractor

Subcontractor

Authority/Consultant

POWER

RESPONSIBILITY

ACCOUNTABILITY

CONTROL

Each of these stakeholders have different so-called needs and “urges” in their pursue for power and political schemes. If you have power, you are able to manipulate responsibility, accountability, and control to your advantage.

POLITICS

SCANDAL

CONSPIRACY

CRISIS

However, in order to gain power, the stakeholders play politics, and when they play politics, there are always scandals, conspiracies, and crises involved. Along the line, there always people so naïve as to get caught in the scandal, those who are aggressively pursuing their own political agenda, and those who are sensitive about the political situation.

To know more information about the Complex Stakeholders Relationship, please refer to other articles by SK.

SECTION 13:

RISK IDENTIFICATION

SK has faced people with the following characteristics during Risk Identification. These are the challenges faced when identifying a real risk.

YOU KNOW WHAT YOU KNOW – E.g.: The IT Security experts know exactly the security specifications required for the project.

KNOW WHAT YOU DON’T KNOW – E.g.: The IT Security experts do not know the type of construction materials required to meet the project requirements.

DON’T KNOW WHAT YOU SHOULD KNOW – E.g.: The system administrator does not know what version of operating system he is installing.

DON’T KNOW WHAT YOU DON’T KNOW – E.g.: None of the project team members have experience in building airport systems before. (If they simply do not know how to build an airport system, how can they ever tell you the risks?)

DON’T KNOW WHAT YOU DON’T KNOW, BUT YOU PRETENDED THAT YOU KNOW – E.g.: A sales person who has never done an airport system before and has no knowledge of airport integrations is telling the programmer how to write software which complies to aviation requirements.

THOUGHT YOU KNEW IT, BUT YOU DON’T – E.g.: All trials cannot be performed unless you have an approved test plan. I thought you knew it, but you don’t.

SECTION 14:

SUMMARY

SK hopes this article can impart some of the lessons learned in implementing Risk Management in your future projects. Bear in mind that there is no a “One Show Fits All” solution; even when you are facing the same situation, with almost the same risks as those identified in this article, your response(s) must adjust to the size, complexity, experience, and skill level of the stakeholders.

Last but not least, SK would also like to impart the difference between effective Risk Managers and effective Crisis Managers. If you have an effective Project Risk Manager in place, it will very likely not be noticed, as it is part of the project plan and is usually driven by team effort.

On the other hand, Crisis Managers are called in if your projects are in deep trouble or in crisis. His or her contributions are obvious and individual-based. Most importantly, a crisis manager’s role is never planned in any projects.

Who would you rather be, a hero who saves a project from a crisis or an effective risk manager?

Shorter version of this publication was published by SK Khor PMP on PMI PM Network Magazine (April 2006 Edition)

Cultural differences shouldn’t stop foreign organizations from pursuing projects in China, but they must go in prepared. BY S. K. KHOR, PMP

Companies shouldn’t be put off by the myths surrounding project work in China. You don’t have to speak Chinese or work for a multinational corporation with a long local presence to secure business deals in the country. Be prepared for differences in the way business is conducted, however. Terms and conditions that may seem unusual in your country are often longstanding traditions embedded in the Chinese business environment.

SECURING Mega IT Projects in China

As the newly promoted Regional Manager in your organization, your first task is to secure by tender, a project which your organization has been pursuing, and to formalize it with a contract. What would your immediate reaction to this first assignment from your CEO who is banking in on this project for the major breakthrough into the massive Information Technology market in the world fastest growing market of China be?

The common and immediate responses from a person facing this scenario are most often that they do not have the ability to speak and understand the Chinese language nor the Chinese’s business practices. However, multi cultural issues should not be a hindrance. The fact that you have to speak Chinese to secure business deals in China is a myth. Nor it is necessary for your organization to be one of those Multi National Corporation with a long local presence in China before you can secure your first IT contract in China.

In China, the difference lies in not treating it as just another tender whereas a norm the justification and logistic for the entire project has been established and confirmed. Understanding what goes on behind the entire procurement process is according to Mr. Wang Yi Ping, a Senior Project Business Director of China Electronic Engineering Design Institute says differentiate a successful tender and a failure. “ In China, it is prudent for the contractor to find out how the customer intend to source for the project funding, the bidding approach and processes, the contracting models and most importantly the contractor has to find out the composition of the evaluation committee and the criteria for evaluation right up to the management of the clarification session until the deal is formalized with the signing of the contract”. Mr. Wang added.

Different type of projects will of course warrant different handling; the range can be as diversified from a private enterprise project such as a Call Center System for a bank to a Mega IT infrastructure system project. In the later, the Chinese National policies may have direct relevance and could affect the overall project strategy and direction. A national mega airport project for example has seen the incorporation of clauses in the Request for Proposal (RFP), which restricts foreign companies’ participation or insists on the transfer of technology from the foreign partner to local Chinese party. It was highlighted by some unofficial sources that the incorporation of these clauses serve to reduce the dependency for the services of the contractors upon completion of the project namely during operation and maintenance phases.

PROJECT FUNDING

The funding source is the most crucial piece of information a potential foreign contractor ought to obtain, as it can have direct influence on the procurement mode, according to Jack Yang, CEO of Groupwise Technology based in Beijing who has recently been awarded a sizeable IT Project for Nanning State Government alongside with a few International European based IT solution provider. Some funding sources have stipulation, which only entails a local Chinese company with a certain amount of paid up capital to participate whilst others put forth a preference for international participation. They are yet some who would stipulate the preference for the currency of transaction which most often than not is in the Chinese currency of RMB.

Project Procurement Processes

There have been many vendors who have been caught in many unexpected situations. Upon purchasing the Request for Proposal (RFP) from a prestigious project owner in Beijing, a group of five prospective companies were requested by the project owner to work together to submit a common IT solution for the project. The project owner only stipulates verbally that one of the five would be awarded the contract to implement the proposed common solution. Three companies opted out as there is no agreement to indicate that their services would be paid. The remaining two companies however proceeded to offer a “pre-contract” free service in the hope that it would develop “Quan Xi” of goodwill and of course the ultimate aim of securing the contract.

Procurement Committee

The Procurement Committee is formed in addition to the project team and this team normally comprises of prominent personnel who is not part of the organisation and whose identity would only be revealed very much later in order to keep their identity from being made known to potential contractors. Even then, the procurement committee decision can be skewed towards the preference of the individual team where factors like price or technology comes into play. A prior relationship or “Quan Xi” can also affect the outcome of the bidding.

Negotiation

Top down decision-making is the common practice in China. It can be deemed as a complex procedure and rather unconventional if the contractors are not familiar with the Chinese negotiation capabilities.

Generally, the Chinese customer are familiar and do utilise the more familiar American or European negotiation skills which to the rest of the business world is an accepted form of practice. However, it is wise not to be caught off guard when “out of the norm” negotiation practice, which is only peculiar to the Chinese, is adopted. It could take effect in the form of a literally “closed door” or in this case “locked door” meeting where both customer and vendor are “locked “ in a hotel room with no communication with the outside until an agreement is reached or a contract signed. It has been recorded that some of these meetings can last up to 48 hours. Another scenario would be then the customer invite two potential vendors into two different rooms and commence negotiations concurrently with or without the vendor knowing that a similar meeting with a competitor is being held next door. Upon the expiry of the 24 or 48-hour time box, the customer would then decide as to whom the contract would be awarded to. Some people said there is nothing unethical as they are merely seeking the best deal. But some, especially those from the West feel strong and against the ‘Reverse-Auction’ negotiation tactic used.

SIGNING FOREIGN CURRENCY BASED CONTRACT

If a foreign organisation can only execute a contract based on the USD currency or the Euros, it is wise to note that the actual transaction can only be executed out of the country as China observed very strict capital currency control and has a very complex tax system. In a situation like this, the Chinese buyer would normally propose to the contractor to sign a tri-party contract whereby the role awarded to the contractor would shift from a prime contractor to that of a sub-contractor. The appointment of a third party who in this case is an organisation who has been authorised by the Chinese Government to sign non RMB currency contract would emerged as the main contractor. It is prudent to be cautious when confronted with a situation like this.

TO VENTURE OR NOT TO VENTURE?

Ultimately, it is important to ensure that you are well armed in your preparation for the way business is conducted in China. The traditional ways of conducting business, the terms and conditions which may seems ‘unusual’ in your country may has long been embedded in the Chinese business environment and cannot be changed instantaneously.

A brilliant history of past performances in your country will not guarantee similar successes in China. Since China opens its doors, there has been much foreign participation in securing projects in China. Some have managed to have profitable closing just as there are many more who are encountering problems in closing their projects or taking the profit out from China